2607: Retirement Planning at Midlife: 6 Tips for a Secure Future by Kathleen Coxwell of New Retirement

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[00:00:39] [SPEAKER_00]: This is Optimal Finance Daily, Episode 2607, Retirement Planning at Midlife, 6 Tips for a

[00:00:47] [SPEAKER_00]: Secure Future by Kathleen Coxwell of NewRetirement.com. And I'm your host and personal finance

[00:00:54] [SPEAKER_00]: enthusiast, Diania Merriam. We're going to jump right into our post for today as we optimize your life.

[00:01:05] [SPEAKER_00]: Retirement Planning at Midlife, 6 Tips for a Secure Future by Kathleen Coxwell of NewRetirement.com.

[00:01:13] [SPEAKER_00]: At Midlife, your income is usually better than when you were younger and you've got

[00:01:17] [SPEAKER_00]: more information to work with. If you're already saving, this period means adding

[00:01:22] [SPEAKER_00]: new layers to your existing retirement plan so it can bloom into something bigger.

[00:01:28] [SPEAKER_00]: If not, it means buckling down and making up for lost time.

[00:01:32] [SPEAKER_00]: Whether you're late to the party or moving forward with bigger plans,

[00:01:35] [SPEAKER_00]: here's a retirement planning checklist for Midlife.

[00:01:39] [SPEAKER_00]: Number one, make sure saving is second nature. By the time you reach your late 30s,

[00:01:45] [SPEAKER_00]: you should already have a good handle on tucking money away for retirement.

[00:01:49] [SPEAKER_00]: One recommendation is that you should have about 1.4 times your annual salary set a time by

[00:01:54] [SPEAKER_00]: the time you're 35, 2.4 times when you're 40 and 3.7 times by age 45.

[00:02:02] [SPEAKER_00]: When you reach 50, you'll want 5.2 times your annual salary saved. However, those are just

[00:02:08] [SPEAKER_00]: benchmarks. You should consider using a retirement calculator to assess how much money you should

[00:02:13] [SPEAKER_00]: be saving. The new retirement retirement calculator will give you a highly personalized number for

[00:02:19] [SPEAKER_00]: exactly how much money you'll need at three different time periods in your life.

[00:02:23] [SPEAKER_00]: Best of all, you can adjust all of your data until you figure out a plan that's achievable.

[00:02:28] [SPEAKER_00]: Some finance experts say that in your 40s, you'll want to have a nice long chat with a financial

[00:02:33] [SPEAKER_00]: planner. They can help spot problems and give you a more accurate idea of your overall financial

[00:02:39] [SPEAKER_00]: fitness as it applies to retirement. If you aren't maximizing 401k or IRA contributions,

[00:02:45] [SPEAKER_00]: now is the time to take advantage of every tax-deferred penny.

[00:02:50] [SPEAKER_00]: 2. Invest with Purpose

[00:02:53] [SPEAKER_00]: If investments make you nervous, they shouldn't. You don't have to watch the market every day and

[00:02:58] [SPEAKER_00]: read all of the financial magazines, although that doesn't hurt. And you don't have to be a

[00:03:03] [SPEAKER_00]: hardcore trader to put your money to work so that it can grow. You might consider thinking

[00:03:08] [SPEAKER_00]: like a pension manager, since that's what you'll be doing. A trader takes lots of high

[00:03:13] [SPEAKER_00]: risks in the hopes of a major payout. A pension manager understands the goals of any investment

[00:03:19] [SPEAKER_00]: and forms a slow and steady strategy that helps meet the future need. The result is a calmer,

[00:03:26] [SPEAKER_00]: more predictable investing style that more often meets its goals, they explain. Between your 401k

[00:03:33] [SPEAKER_00]: or IRA or both and modest long-term investments, the time period between your late 30s and your

[00:03:40] [SPEAKER_00]: 50s should help you beef up your retirement savings into a strong, dependable foundation for later.

[00:03:47] [SPEAKER_00]: 3. Set Goals and Priorities

[00:03:51] [SPEAKER_00]: There is a reason that this time is famous for crazy antics and crises. But a midlife crisis

[00:03:56] [SPEAKER_00]: does not have to be a bad thing. Your 40s and 50s are an ideal time to take stock of what

[00:04:02] [SPEAKER_00]: you've done and what you still want to do. With whom do you want to spend time? Where

[00:04:10] [SPEAKER_00]: your goals and priorities should be worked into your retirement planning?

[00:04:14] [SPEAKER_00]: 4. Create and Maintain a Retirement Plan

[00:04:18] [SPEAKER_00]: Retirement may still be a decade or more away, however it's not too early to create a detailed

[00:04:24] [SPEAKER_00]: retirement plan. Creating a plan for when to quit your current job, when to start social

[00:04:29] [SPEAKER_00]: security, whether you'll downsize or not, how much you can spend every month and more

[00:04:34] [SPEAKER_00]: will help make taking action now even easier. Creating a plan is like visualizing your future.

[00:04:42] [SPEAKER_00]: You can see what else you need to do and the importance of the steps you're taking now

[00:04:45] [SPEAKER_00]: for a secure retirement. Midlife is a time when goals can become clearer because you have so

[00:04:51] [SPEAKER_00]: much more information to work with, where before you only saved what you could towards

[00:04:56] [SPEAKER_00]: a somewhat fuzzy goal. Now some of the shapes on the horizon are starting to clear up.

[00:05:01] [SPEAKER_00]: And as time goes by, you simply need to update your plan,

[00:05:05] [SPEAKER_00]: making adjustments based on your evolving goals and situation.

[00:05:09] [SPEAKER_00]: 5. Bump Up Your Savings When The Kids Leave Home

[00:05:14] [SPEAKER_00]: As your kids get older, you can probably cut back a little more, streamline your budget

[00:05:18] [SPEAKER_00]: and build up your savings. And research shows that when kids leave home or graduate college,

[00:05:24] [SPEAKER_00]: it's a huge opportunity to really start saving a lot more for retirement.

[00:05:28] [SPEAKER_00]: The idea is that you start saving all of the money you've been spending on the kids.

[00:05:33] [SPEAKER_00]: And number 6. Try A Sabbatical Or Mini Retirement

[00:05:37] [SPEAKER_00]: Think again if you believe retirement at age 50 is impossible.

[00:05:42] [SPEAKER_00]: Sure, maybe you can not quit working forever, but maybe you can try on retirement and see

[00:05:47] [SPEAKER_00]: what it feels like. More and more people are doing a mini-retirement by taking a month

[00:05:51] [SPEAKER_00]: or a year long sabbatical from work. Some temporary retirees opt to spend time with

[00:05:57] [SPEAKER_00]: family, others pursue a hobby and still others explore alternate work arrangements, a second career.

[00:06:04] [SPEAKER_00]: Midlife is the time for key decisions and taking action.

[00:06:09] [SPEAKER_00]: Saving and saving more is key during midlife. Getting a handle on your retirement plan

[00:06:14] [SPEAKER_00]: is another critical checklist item. But there are also many other big decisions to make,

[00:06:19] [SPEAKER_00]: and instead of just thinking about retirement, you need to take some action.

[00:06:23] [SPEAKER_00]: The following factors can drastically impact how much retirement savings you will eventually need.

[00:06:29] [SPEAKER_00]: If you're a homeowner, you probably want to consider whether you'll stay put and pay off

[00:06:33] [SPEAKER_00]: the house or if you'll have a mortgage in one location or another forever.

[00:06:38] [SPEAKER_00]: Housing is usually a household's most costly expense. You'll need a lot less

[00:06:42] [SPEAKER_00]: than retirement savings if you've paid off your mortgage.

[00:06:46] [SPEAKER_00]: Can you get serious about paying off debt, especially non-mortgage debt?

[00:06:51] [SPEAKER_00]: Health issues might emerge during this time that direct your planning towards long-term

[00:06:56] [SPEAKER_00]: health care and you've got a good handle on your money management style.

[00:07:00] [SPEAKER_00]: Will you help your kids pay for college or prioritize retirement savings?

[00:07:05] [SPEAKER_00]: And when do you want to leave your current job? Will you transition into retirement or

[00:07:09] [SPEAKER_00]: stop working cold turkey? No two people have the same life experiences,

[00:07:15] [SPEAKER_00]: and no two people want the same thing out of retirement.

[00:07:17] [SPEAKER_00]: And there is more than one way to achieve a secure retirement.

[00:07:22] [SPEAKER_00]: Now is the time to set more focused goals and tweak your saving and investing strategies

[00:07:27] [SPEAKER_00]: to make your retirement exactly what you need it to be.

[00:07:35] [SPEAKER_00]: You just listened to the post titled, Retirement Planning at Midlife,

[00:07:39] [SPEAKER_00]: Six Tips for a Secure Future by Kathleen Coxwell of newretirement.com

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[00:08:49] [SPEAKER_00]: I hear from a lot of people who feel like they got a late start on saving for retirement.

[00:08:54] [SPEAKER_00]: In fact, there's a podcast and Facebook group called Catching Up to Fy, specifically geared

[00:09:00] [SPEAKER_00]: towards people who feel like they're behind on saving and investing. I think the fire movement

[00:09:05] [SPEAKER_00]: appeals to late starters because the aggressiveness of saving and investing a higher than average

[00:09:11] [SPEAKER_00]: percentage of your income allows you to simply reach the goal faster, and late starters don't

[00:09:18] [SPEAKER_00]: have the luxury of time. One of the most popular speeches from the Economy Conference,

[00:09:24] [SPEAKER_00]: which is an event I produce, is from Jackie Cummings Koski, who got up in front of hundreds

[00:09:29] [SPEAKER_00]: of people and shared her real numbers on how she retired in 10 years. What was so compelling about

[00:09:36] [SPEAKER_00]: it was that she was 38 when she got started, and she was a single black mother making less than

[00:09:42] [SPEAKER_00]: six figures. She did that speech just as she pulled the plug on her career at 49 years old.

[00:09:48] [SPEAKER_00]: I actually just talked to her today. She's going to be at the next Economy Conference

[00:09:52] [SPEAKER_00]: in March, helping me with a breakout session for the Catching Up to Fy group.

[00:09:57] [SPEAKER_00]: Four years in, her retirement is going very well. There's a lot of fear mongering about how much

[00:10:03] [SPEAKER_00]: money you should have saved by a certain age, but I'd encourage you to relax a bit. You can't

[00:10:10] [SPEAKER_00]: think creatively with a body or mind that is overly stressed. Money is completely figure-outable,

[00:10:18] [SPEAKER_00]: and the fact that you're here tells me you're going to be just fine.

[00:10:21] [SPEAKER_00]: And that should do it for today. Thank you for being a subscriber or follower of the show

[00:10:27] [SPEAKER_00]: and sharing it with others. It really goes a long way to keep this podcast going.

[00:10:32] [SPEAKER_00]: Have a great rest of your day, and I'll see you tomorrow where your optimal life awaits.